In light of the fact that federal funding for the Children’s Health Insurance Program (CHIP) expired on September 30, 2017, the Kaiser Family Foundation (KFF) analyzed the impact upon states and potential outcomes. Without an extension of federal funding for CHIP, KFF reported that states have or will run out of federal CHIP funding and may face budget shortfalls for CHIP, which covered 8.9 million children in 2016.

According to KFF under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) the enhanced federal funding matching rate was further increased by 23 percent. With this, the CHIP federal matching rate ranged from 88 percent to 100 percent. Because nearly all the states included federal funding for CHIP when creating their FY 2018 state budgets, nearly all the states will face a budget shortfall if the federal funding is not extended.

In the absence of an extension of federal funding for CHIP, some states will have to reduce CHIP coverage. States that have CHIP-funded Medicaid expansions must maintain the underage under the ACA “maintenance of effort” requirement, leaving state costs to increase in the face of lower federal Medicaid match rate. However, states with separate CHIP coverage are not required to maintain it, and states may freeze enrollment or discontinue CHIP coverage altogether.

In the short run, states can continue to use federal funding accrued through the September 30 expiration. Eleven states reported that they would run out of federal funding for CHIP by the end of FY 2017, and at least one state reported that their funding would be depleted at the expiration date. By redistribution of unspent CHIP funds, the Centers for Medicare and Medicaid Services (CMS) was able to provide enough additional funding to allow that state to maintain coverage without a budget shortfall through October. CMS was also able to provide redistributed funds to several other states that were close to running out of funds.

In order to address the expected states’ budget shortfalls, Congress is working on legislation for continued funding. Both the Senate and the House have reported bills out of committee to provide an extension of federal funding for CHIP. The bills from the House and Senate contain many of the same provisions, including a five-year extension for federal funding of CHIP and a transition down from the enhanced 23 percent match provided by the ACA. However, the House bill includes some additional provisions not included in the Senate bill. Both bills still need to be debated and voted upon by the full House and Senate, and if both are passed, Congress will have to reconcile the difference between the two bills.

The U.S. Senate confirmed Scott Gottlieb, M.D., as FDA Commissioner on May 9, 2017 in a 57 to 42 vote, with all voting Republicans and five Democrats voting for confirmation, and all remaining Democrats voting against confirmation. Gottlieb’s ties to the investment company, New Enterprise Associates (NEA), were discussed at length during contentious confirmation hearing; nevertheless, he was easily confirmed. Sen. Lamar Alexander (R-Tenn), who chaired Gottlieb’s confirmation hearing, opined that new Commissioner “will help American families benefit from the promise of 21st Century Cures.”

Gottlieb most recently served as a resident fellow at the conservative American Enterprise Institute (AEI), clinical assistant professor at New York University School of Medicine, and a member of the HHS Federal Health IT Policy Committee. He served as Deputy FDA Commissioner in the George W. Bush administration from 2005 to 2007.He is known for encouraging a quicker FDA approval process for new drugs, with a focus for shortening wait times on large, clinical trials (see Trump nominates Gottlieb for FDA Commissioner, Health Law Daily, March 13, 2017). During his April 5, 2017 confirmation hearing, Democratic senators expressed concern about his financial ties to pharmaceutical and medical device companies (see Gottlieb’s ‘financial entanglements’ troubling or heartening, depending on the senator, Health Law Daily, April 5, 2017). Gottlieb acknowledged the importance of impartiality and told Senators, “I want to earn and keep the public’s trust.”